For many firms the limits on capital funds are "soft." By this we mean that the capital rationing is not imposed by investors.

Question

Quizplus · Accepted Answer

Soft capital rationing refers to the limit on capital funds that is not imposed by external investors, but rather determined by the firm's internal decision-making processes. This allows a firm to have some flexibility in allocating its resources without strict external constraints.

For Many Firms the Limits on Capital Funds Are "Soft